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Need for more private investment Projects Investment in Tamil Nadu
SHASHIKANT HEGDE
THE southern state of Tamil Nadu has figured among the top five investment destinations of India since economic liberalisation. Pro-investor friendly policies adopted by the state helped it to keep pace with other major southern states, Andhra Pradesh and Karnataka, in attracting project investment.
Apart from missing the steel rush the country witnessed in 2004, the state also failed to attract fresh investment from private promoters. As a result, the total outstanding investment declined 5.3 per cent in 2005. The decline continued in 2006 also and the total investment went down by a further 2.5 per cent.
The announcement of a few large automobile and power projects helped Tamil Nadu to halt the downslide in project investment in 2007 and the state saw the aggregate envisaged investment increase by 2.7 per cent.
In the current year ended June 2008, the state also benefited from revival in the investment boom witnessed across India and attracted 678 new projects worth Rs 45,521 crore. Sectors which have received large investments are textile, machinery, automobile, thermal power, roadway, real estate, industrial park and SEZ.
Despite staging a 24 per cent rise in total investment as of June 2008, Tamil Nadu was pushed out of the league of top five states and had to be satisfied with 6th rank in terms of total envisaged investment. West Bengal, largely helped by mega steel, aluminium and power projects, nudged out Tamil Nadu from the top five.
Traditionally, the public sector dominated the state's investment canvas. As of June 2008, the private sector accounted for only one-third of the total investment planned in the state.
Unless Tamil Nadu attracts increased private investment, its dream of returning to the top five may remain only a dream.
Published
in Projectmonitor issue: July 14, 2008